Apple fought for years to break the iPhone into the Chinese marketplace and appears to be doing what it takes to stay there.

Per Macworld UK, the company appears to have tweaked its iPhone to support a Chinese security protocol for wireless networks. This follows suit as companies increasingly adopt Chinese government-backed technologies and standards to stay on the nation’s store shelves.

The move suggests Apple may soon launch a new version of the iPhone in China with Wi-Fi, a feature that regulations previously barred.

Chinese regulators last month approved the frequency ranges used by a new Apple mobile phone with 3G and wireless LAN support, as noted by China’s State Radio Monitoring Center. The device appears to be an iPhone and uses GSM and the 3G standard WCDMA, just like iPhones currently offered in China by local carrier China Unicom.

Apple removed Wi-Fi on the iPhones now sold in China because regulators there began approving mobile phones with WLAN support only last year. These units are only supported if they use a homegrown Chinese security protocol called WAPI (WLAN Authentication and Privacy Infrastructure).

The new Apple phone does support WAPI, according to the Chinese regulatory site. If an iPhone with WAPI goes on sale, Apple would be one of the highest-profile companies to offer a device using the protocol.

The new Apple phone may also support standard Wi-Fi. The Chinese security protocol is an alternative for just part of Wi-Fi, and devices can support both it and the technology it is meant to replace.

China has promoted the protocol, along with other homegrown technologies like the 3G standard TD-SCDMA, as part of a vision to produce more of its own technology and have it adopted by international companies.

Earlier this year, China Unicom chairman and CEO said the company was in talks with Apple about offering a version of the iPhone with Wi-Fi.

The new Apple device, like all mobile phones, still must obtain a network access license from regulators if its maker wants to sell it in China.

Stay tuned for additional details as they become available.

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The individual who found the lost fourth-generationan iPhone prototype, then reportedly held onto it for weeks and sold it for US$5,000 has been identified as Brian Hogan, a 21 year old resident of Redwood City, California.

Per Wired’s Threat Level blog, Hogan attorney Jeffrey Bornstein told Wired that Gizmodo has “emphasized” to his client that “there was nothing wrong in sharing the phone with the tech press,” a restatement of events apparently intended to downplay the fact that the tech blog publicly paid Hogan for receipt of a device that clearly did not belong to him.

The blog posting stated that Hogan was only able to access Facebook on the prototype phone before it was shut down. Gizmodo reported the phone owner’s identity via that Facebook page, making it clear that Hogan had detailed knowledge of who the phone belonged to, despite Hogan’s decision to hold onto it for weeks before selling it to Gizmodo along with the identity of the engineer who had lost it.

A report by CNET noted that Hogan “had help in finding a buyer for the phone.” It identified “Sage Robert Wallower, a 27-year-old University of California at Berkeley student” as an associate of Hogan.

CNET said Wallower acted as a middleman, along with at least one other unnamed individual, who “contacted technology sites about what is believed to be Apple’s next-generation iPhone.” The report noted that Wallower “previously worked as a computer security officer at the publicly traded Securitas corporation and that he possesses ‘top-secret clearance,’” according to his LinkedIn profile.

The report also noted discovery of an Amazon suggestion list created for Wallower by a friend which included “a book co-authored by ex-hacker Kevin Mitnick titled, ‘The Art of Intrusion: The Real Stories Behind the Exploits of Hackers, Intruders and Deceivers.’”

Wired’s latest blog posting sympathetically characterizes Hogan as working in a church-run community center and serving as a volunteer benefiting Chinese orphans as well as orphans in Kenya who need medical care. A previous Threat Level blog entry on the iPhone prototype story debuted the idea that “news accounts depicting the $5,000 payment as a ‘sale’ are incorrect,” setting the stage for later identifying Hogan as a hero to orphans worldwide, who simply ‘made a mistake involving sharing,’ rather than being a thief who sold stolen merchandise for thousands of dollars instead of returning it to its known owner.

If you were curious about the exact components to go into the fourth-generation iPhone, a report from The Chosun reported Wednesday that Korean electronics giant LG Innotek will supply 5-megapixel camera sensors for the upcoming handset.

Per the article, LG Innotek began “producing the sophisticated cameras at its plant in Gumi this month and will mass produce them starting in the second half of this year.”

The report contradicts a rumor issued this past December, in which it said that OmniVision, the supplier of CMOS image sensors for the current iPhone, expected to see demand for its sensors in iPhones grow as high as 45 million after it secured a deal to supply a 5-megapixel camera for the next-generation iPhone.

In addition to the camera upgrade from 3.2 megapixels to 5.0 megapixels, the fourth-generation iPhone model is also expect to gain a camera flash. Sources close to the story stated that Apple had been shopping around for LED camera flash components and may have settled on Philips’ LUXEON LED camera flash technology.

Since then, there has been substantial supporting evidence supporting those claims, such as the presence of camera flash functions in Apple’s pre-release builds of iPhone Software 4.0.

The fourth-generation iPhone, is also expected to ship with a front-facing video camera that will work with a mobile version of Apple’s iChat video conferencing software set to debut at the same time.

Per MacRumors, Engadget received a comment from AT&T stating that installing data tethering could create high traffic usage that could hamper network performance:

“iPhone tethering has the potential to exponentially increase traffic, and we need to ensure that we’re able to deliver excellent performance for the feature over and above the increases in data traffic we’re already seeing  before we will offer the feature.”

Tethering is the process of using your iPhone as a wireless internet modem for your other devices such as your laptop.

Feel free to hurl your two cents in on this one.

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Following the police raid of Gizmodo editor Jason Chen (the editor who wrote about the now-infamous fourth-generation iPhone prototype), the examination of Chen’s seized computers has been put on hold.

Gizmodo had paid US$5,000 for an iPhone prototype that had been accidentally left behind at a Silicon Valley bar and written extensively about the device.

Per BBC News, Chen’s lawyers have argued that Chen is protected by California’s shield law and State lawyers are considering whether the raids in Fremont were legal.

The shield law states that journalists have the right to protect their unpublished material from examination.

In the meantime, San Mateo county chief deputy district attorney Steve Wagstaffe said he was considering the matter and expected to issue a legal memo later this week.

Wagstaffe cited that the computers would not be examined until then and that the laptops, hard-drive and USB memory sticks that belong to Mr Chen are currently being held by the Rapid Enforcement Allied Computer Team (React), the state’s high-tech crime taskforce that conducted the raid.

They ordered the search after Apple reported the phone stolen.

Earlier, Wagstaffe had defended the raid, saying prosecutors had considered whether reporter shield laws applied to the case but decided to proceed.

He also said that police knew the identity of the person who took the phone and that they had talked to him.

Per Engadget, developer Greg Hughes has submitted an application that allows the iPhone and iPod touch to sync wirelessly with iTunes over Wi-Fi, and plans to submit the software to the App Store later this week.

The software, dubbed “Wi-Fi Sync,” requires a separate desktop application on either a Mac OS X or Windows machine that allows the sync to occur over a wireless network. Hughes, released the following video that shows the syncing process with the application, which must first be approved by Apple before it could be released for the App Store:

The first sync includes a pairing process that must only be done once to verify that the iPhone is to be synced with the computer. Once a handset has been paired with a computer by accepting prompts on both devices, iTunes is then launched on the computer and begins syncing with the mobile device.

It’s unknown as to whether Apple will approve the application or if it violates the company’s development rules on any level.

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It might be fair to say that Apple isn’t happy with Gizmodo about that iPhone story.

Per AppleInsider, California’s Rapid Enforcement Allied Computer Team entered Gizmodo editor Jason Chen’s home last week and seized four computers and two servers in its felony investigation of an obtained prototype iPhone.

Gizmodo revealed the information, along with a copy of the warrant issued by a judge of the superior court in San Mateo County, Calif. In response, the website’s post argued that it believes the warrant was invalid under section 1524(g) of the California Penal Code.

The warrant states that there was probable cause that Chen’s computers were “used as the means of committing a felony.” The REACT authorities entered Chen’s home without him present, according to Gizmodo.

A full inventory of the seized material includes a MacBook, MacBook Pro, 32GB iPad, 16GB iPhone, an AirPort Extreme, IBM ThinkPad, a Dell desktop, external hard drives, and many more. The items were removed from numerous rooms in his home.

An account of the events by Chen was also filed. The Gizmodo editor said he and his wife came back home from dinner around 9:45 p.m. when they noticed their garage door was half-open. When he tried to open the door, officers searched him and informed him that his property was under their control.

Chen’s front door was reportedly broken open so the authorities could enter, and those on the scene informed him that he could be reimbursed for the damage. Chen was provided with a copy of the warrant, and declined to comment to the authorities. He was not arrested.

Last week it was revealed that police are investigating the Gizmodo purchase of a prototype iPhone from Apple. The publication’s parent company, Gawker Media, has openly admitted it paid US$5,000 to obtain the device from a man who claimed he found it at a California bar.

The prototype was allegedly left at the Redwood City establishment by an Apple engineer. The employee frantically searched for the device, calling the bar multiple times to see if it had been returned, but the owner of the bar said no one ever contacted him to say they had found an iPhone. Gizmodo claimed that the person who found the phone attempted to call Apple and did not receive a response.

Gizmodo returned the iPhone to Apple after the company requested it be given back, but not before the publication wrote numerous stories about the device and revealed the name of the engineer who allegedly lost the device. The website also disassembled the hardware to confirm it was manufactured by Apple.

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There could be a reason that Steve Jobs is madder than usual about the leak of the fourth-generation iPhone prototype; it may have been fairly close to the final product.

Citing sources familiar with Apple’s fourth-generation iPhone, Daring Fireball revealed that the barcode affixed to the prototype device obtained by Gizmodo, which read “N90_DVT-GE4X_0493,” gives insight into how far along Apple is in the design of its next-generation phone.

“‘N90′ is Apple’s codename for the fourth-generation GSM iPhone, slated for release this June or July,” Daring Fireball’s John Gruber wrote. “‘DVT’ stands for ‘design verification test,’ an Apple production milestone. The DVT milestone is very late in the game; based on this, I now believe that this unit very closely, if not exactly, resembles what Apple plans to release.”

Gruber went on to say that although Apple is extremely secretive about unreleased products, it simply must let the units be used off of its Cupertino, Calif., campus to be tested. Apple reportedly distributes dozens of near-final units for field testing months in advance. Gruber said this practice is even more widespread with the iPhone than other Apple-developed products, because of the extensive nature of cellular network testing.

“The same was true for the 3GS a year ago, and the 3G the year before that,” he wrote. “The original iPhone was announced six months before it went on sale; in the interim between the January announcement and its debut in stores at the end of June, limited numbers of them were used for field testing.”

Even Apple co-founder Steve Jobs himself was spotted with an iPhone in public before the device was formally released to the masses.

The fact that the next-generation prototype iPhone was smaller and more compact than the current iPhone 3GS handset gave Apple the ability to wrap the prototype with an outer casing that made it appear to look like a current-generation device. The person who allegedly found the handset at a bar didn’t realize it was wrapped in a case until the next day.

The design of the iPhone has been largely unchanged from when it was first introduced in 2007, but the lost prototype and its near-final state would suggest Apple intends to modify the look of its handset. The discovered device abandons the curves of the previous-generation models, instead adopting a flat back made of new material to improve reception. It also sported a more angular look with an aluminum border. The prototype also replaced the volume rocker with two separate buttons.

Even greater changes were found inside the device, where Gizmodo discovered shrunken components to accommodate a battery that was 19% larger than the current-generation model’s power supply. The logic board in particular was drastically reduced in size, just one-third the size of the current model.

Stay tuned for additional details as they become available and let us know what’s on your mind in the comments.

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Amidst stolen iPhone prototypes and very influential companies arguing, it’s cool to see that there are people just out there working on cool hacks for other people’s enjoyment.

Per CNET, David Wang managed to boot Google’s Android operating system on an iPhone 3G handset. Wang, the “planetbeing” member of the iPhone Dev Team posted a video demonstrating Android on an iPhone Wednesday.

The demo shows the boot process and Wang using Android for browsing, receiving a text message, answering a phone call, and playing music. The phone is set up with a dual-boot configuration and indeed the video begins with it running iPhone OS.

“It’s not really production quality yet,” Wang said on the video. “I’d say it’s alpha quality. But pretty much everything works.”

The Android-on-iPhone hack is a notable technical accomplishment and does indicate what’s possible. Wang has been working since at least 2008 to boot Linux on the iPhone, according to his blog. The demonstration uses a first-generation iPhone, but newer models should be supported at some point.

“It should be pretty simple to port forward to the iPhone 3G. The 3GS will take more work,” Wang said on the blog. “Hopefully with all this groundwork laid out, we can make Android a real alternative or supplement for iPhone users. Maybe we can finally get Flash. ;)”

Still, there’s work to be done. “It’s slightly buggy because I didn’t bother to implement all the Android-specific driver extensions,” he said in the video demonstration. And it’s slow, since Wang can be seen using a debug version of Android.

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The plus side: Gizmodo tore apart and studied the iPhone prototype, revealing some interesting things and proving you can find some amazing things at a bar.

The down side: Steve Jobs is probably angry about this and several buildings on Apple’s campus have already been destroyed thanks to his eye lasers.

Per Gizmodo, the prototype iPhone was disassembled, revealing a tightly packed interior with much smaller components, allowing the device to be thinner than its predecessor while also making space for a much larger battery.

The teardown found that the main logic board of the prototype iPhone was about one-third the size of the board that controls the current-generation iPhone 3GS. “Basically, the guts have shrunk drastically,” author Jason Chen wrote.

Those smaller components allowed Apple to cram a battery that is 19% larger than the current iPhone’s power supply into the prototype device. And while the discovered hardware was thinner, it also reportedly weighed 3 grams more than the current-generation handset, thanks to the larger battery.

Disassembling the handset proved to be interesting, with between 40 and 50 screws inside the prototype iPhone. Chen also dispelled a rumor that the battery on the handset is user-removable (the tightly packed case must be disassembled to access the battery).

“Everything fits in here like an intricately-designed jigsaw puzzle,” the report said. “This is definitely laid out like a final product. To think that there’s more room left for any components for this case is unreasonable. Unless Apple decides now to go with a larger case so they can fit more things in there, this is the most that we’re going to see this summer.”

As to whether the device sports a custom-built Apple processor, like the iPad’s A4 CPU, that remains a mystery. The main logic board was encased in metal and could not be removed without breaking the device, and did not feature markings to indicate where its components originated.

The new hardware featured a forward-facing camera, high-resolution 960×640 pixel display, camera flash and a secondary mic for noise cancellation.

The prototype’s design also proved different from the iPhone we’ve become familiar with, which has looked largely the same since the device was first unveiled in 2007. Apple changed the back of the device to be completely flat, with a material said to be made either of glass or plastic to improve reception.

The device was allegedly found at a bar in Redwood City, Calif., where an Apple software engineer reportedly left it by mistake. It was wrapped in a casing that disguised it as an iPhone 3GS.

Gawker Media paid US$5,000 to an unknown party to receive the device. After it was disassembled and revealed to millions of Internet readers, Gizmodo reportedly returned the device to Apple.